Will Walmart emerge as a leader of the Autonomous Revolution?
If Walmart succeeds, society will greatly benefit as the autonomous vehicle adoption timeline will be moved up greatly.
Currently, there are 4,692 Walmart retail locations (as of April 30, 2017) in the United States comprising multiple retail locations in every single State. This unparalleled reach gives Walmart a unique competitive advantage over every company currently working on autonomous vehicle technology – physical retail locations.
With this enormous geographical reach, Walmart is in a potential unbeatable position to bring society into the autonomous era by hosting autonomous vehicle demo days in every State. Walmart sponsored autonomous vehicle demo days would help alleviate the fear of autonomous vehicles.
The fear of autonomous vehicles is a fear of the unknown as a majority of the public have never been in an autonomous vehicle, let alone gone for a ride in one. A recent survey from AAA states that 78% of Americans are afraid to ride in a self-driving vehicle. The reason for this data is simple, 99% of Americans have not been for a ride in an autonomous vehicle.
While 99% of Americans may not have been for a ride in an autonomous vehicle yet, 95% of U.S. consumers shopped at Walmart or on WalMart.com in 2016.
The overwhelming reason why U.S. consumers shop at Walmart is value. The same value that U.S. consumers currently enjoy at Walmart will soon be a feature of autonomous vehicle usage, as the cost of ground transportation stands to dramatically decrease in coming years.
As the cost of ground transportation decreases while efficiencies in ground transportation increase, the perfect storm is brewing for a once-in-a-generation change in society – the end of car ownership.
When car ownership is eliminated for the majority of Americans, the savings will be tremendous. On average, according to think tank RethinkX, consumers will save $5,600 per year as they transition to on-demand autonomous vehicle services.
Which leads to a potentially unbeatable value proposition: savings combined with on-demand convenience. This value proposition plays directly into one of Walmart’s core strengths – value. This value proposition was reiterated by Doug McMillon President & CEO of Walmart when the acquisition of online shopping platform Jet.com was announced:
Together, Jet.com and Walmart can win the future of retail. We’re in the business of “saving people money so that they can live better.” But the value of our customers’ time cannot be overstated. To win the future of retail, we must save customers both money and time. By combining with Jet.com’s technology, shopping experience, customers, and talent, we will do exactly that. We will exceed their expectations!
The expectations set forth in the announcement are currently being exceeded on Wall-Street as Walmart’s e-commerce sales organically grew 69% in Q1 2017.
To further continue to exceed expectations, Mr. McMillon should make another bold move by going all-in on autonomous vehicles. This could be done in one of two ways.
One, by acquiring an autonomous vehicle start-up and giving the company the resources they need to compete in the marketplace. Or two, signing a partnership with an autonomous vehicle company to offer the service exclusively to Walmart’s customers.
The global passenger mobility market, including AV’s, is projected to be worth $7 trillion by 2050. Walmart could undercut every single autonomous vehicle on price to gain share right out of the gate for a market opportunity as large as this one.
Doug McMillon has stated; “To win the future of retail, we must save customers both money and time.” Autonomous vehicles will allow Walmart to win the future of retail, as autonomous vehicles will save consumers time and money.
With fully autonomous vehicles, Walmart could fully integrate their e-commerce shopping platform into the vehicle further expanding the company’s reach.
Either decision would position Walmart well in an autonomous future. William Ruh, Chief Digital Officer at General Electric, recently told the Wall Street Journal, “Ten years ago, innovation was based on features and functions, now it’s about your business model and transforming your industry.”
It’s time for Walmart to transform the retail industry by going all in on autonomous vehicles and leveraging its unique competitive advantage – physical retail locations in all 50 States. If Walmart succeeds, society will greatly benefit as the autonomous vehicle adoption timeline will be moved up greatly.